Immigration overflow: the systemic rorting of Australia’s visa system

The Australian Population Research Institute (APRI) has released an alarming new report entitled “Immigration overflow: why it matters”, which examines the widespread rorting of Australia’s visa system, as well as the crushing impact of Australia’s high permanent immigration program on Sydney and Melbourne.

The major findings from the report, which was authored by Dr Bob Birrell, Ernest Healy and Bob Kinnaird, are provided below:

Major findings

We highlight two issues. The first is the high and increasing numbers of IT professionals being granted 457 visas. They constitute by far the largest occupation group within the 457 program. Most are Indian nationals who are sponsored by Indian IT service companies. They have been successful in winning a major chunk of Australia’s IT consulting work on the basis of these 457 visa holders. They have succeeded in part because they are paying these professionals much lower salaries than the market rate for IT professionals in Australia.

The second issue is that the Australian government has persisted with a record high annual permanent migration intake of around 205,000, despite the weakening of the Australian economy since the end of the resources boom in 2012. This permanent intake is the major source of Australia’s very high rate of population growth. This is having a disastrous impact on Sydney and Melbourne where just over half of the migrants settle…

Any relationship that there was between skills recruited under the pointstested visa subclasses and shortages in the labour market has eroded. As to the qualities of the migrants selected, the selection system bar has been set so low that if any high skilled persons are visaed it is an accident.

It is currently the clearly stated Coalition Government policy to ignore the current state of the labour market when occupations are assessed for listing on the SOL. The SOL acts as smokescreen behind which the government’s real priorities are exercised.

The first of these is the achievement of its population growth targets. The second is to support the overseas student industry, whose recruitment strategies depend on these graduates having a strong chance of obtaining a permanent residence visa on completion of their course. To this end the points test has been crafted so as to ensure that applicants who have graduated from Australian universities are given priority…

The report notes how IT professionals, engineers and accountants (including auditors) are the key professions where foreign worker visas are being issued, despite these industries having significant surplus labour.

The below chart combines the permanent and 457 visa data together and shows the high barriers faced by Australian graduates competing with foreign workers:

The 17,185 IT professionals visaed in 2015-16 (Table 1) indicate the scale of the problem. By contrast, just over 5,000 residents are currently completing undergraduate course in IT each year.

What you will notice from the above table is that trades people – with the exception of cooks – are conspicuously absent from the above table, despite claims that migrant workers are needed to build-out Australia’s booming cities:

There were 60,735 primary applicants visaed under the permanent entry skilled program in 2015-16. Of these, only 6,147 were tradespersons. This group included just 1,658 construction tradespersons. By far the largest group in the trades were chefs, cooks, bakers and pastrycooks, who together comprised 4,155 or 68 per cent of all tradespersons visaed in 2015-16.

The story was similar for the 457 program. In 2015-15, of the 45,395 primary applicants visaed only 7,201 were tradespersons, of whom 1,547 were in construction trade occupations. Their numbers, too, were dwarfed by the 4,751 chefs, cooks and pastrycooks granted 457 visas in 2015-16.

Nevertheless, it is the IT sector where local workers are facing the most stiff competition from foreign workers, especially those from India who are being paid low wages:

As Table 2 shows, some 76 per cent of the 7,542 457 visas issued in the three IT occupations listed were to Indian nationals. The great majority of these were sponsored by Indian IT service companies as intra-company transferees…

Once in Australia their staff are being paid at much lower rates than experienced resident IT professionals and in some cases even new local graduates.

Even more disturbing is the relatively high proportion of these Indian IT professionals (28 per cent) whose 457 visas were approved at the extremely low base salary of $53,900 or less. This is despite the fact that only eight per cent of the 457 visas granted to Indians in the two ICT occupations in 2014-15 were aged less than 25.

The median starting salary for local ICT graduates under the age of 25 is around $54,000. Coincidentally, the 457 minimum salary ‘floor’ is set at $53,900…

As the data in Appendix I show, between 2012-13 when Labor was in office and 2013-14 under the Coalition the proportion of Indian 457 IT professionals approved at the very low base salaries increased dramatically, from eight per cent to 27 per cent…

Clearly, the legislated requirement to pay the 457 market salary rate is not being implemented in the case of the Indian IT service companies (and perhaps other multinationals with Indian branches). The violation is obvious, given that more than one-quarter (28%) of Indian 457s in the two ICT occupations had their visas approved at no more than Australian IT graduate starting salaries…

The report then turns its sights to Australia’s permanent migration program, whose target has been set at a record high level despite the end of the mining boom, and whose influx is choking living standards in Sydney and Melbourne:

The permanent migration intake includes family migrants and the humanitarian program. However, the largest part is made up of migrants visaed under the skilled visa subclasses. The current target for this latter group in 2016-17 is 128,000 (the same level as in 2015-16). This target is even higher than was the case during the investment phase of the resources boom when it reached 125,755 in 2011-12. In addition, there is an annual target of around 61,000 family visas (not including the dependents of skilled migrants) and around 14,000 for humanitarian migrants. The total of around 203,000 is a record high.

The permanent program is the dominant contributor to Australia’s high rate of population growth, though there is also a contribution from net movements in and out of Australia from temporary migrants and Australian residents. The result is that Australia is experiencing the highest rate of population growth in the developed world (apart from Luxembourg).

The main impact of these migration movements has been felt in Sydney and Melbourne. This is because there has been a recent surge in the proportion of migrants locating in Sydney and Melbourne. Just over 50 per cent are currently doing so. As a consequence Melbourne’s population is growing by 90,000 to 100,000 a year and Sydney’s population by 80,000 to 90,000 a year.

The consequences for Sydney and Melbourne are serious. As we have documented elsewhere,9 some 64 per cent of the growth in households in Sydney and 54 per cent in Melbourne is due to net overseas migration. These migrant households are vying with residents, investors and upgraders for scarce family friendly housing (mainly detached houses). This, along with tax inducements to investors and record low interest rates, has led to huge increases in housing prices. Younger resident households and migrant households themselves are being priced out of the market. Congestion and competition for access to scarce public facilities, including hospitals, is also getting worse.

Given these consequences, why is the Australian Government and the Labor Opposition supporting the current permanent migration program? As we will see later, both parties do this because of the impetus that population growth gives to overall economic growth (rather than per capita growth, which both parties ignore).

But if this were the only justification, migration advocates would have a tough time sustaining their case at a time when job markets are weak. In our view, the permanent entry program has escaped scrutiny because advocates have created the illusion that it is delivering skills that will aid the economy’s transition to a more knowledge intensive economy.

The report notes how the biggest sources of skilled permanent migrants – engineers, accountants and IT professionals – are also the areas with the biggest surplus of workers:

Thus, the overall immigration system is destroying career prospects for local graduates in these (and other) areas:

Why is this happening? It is partly because in making its decisions the government has to deal with lobbying against removal from the [skilled occupations list] SOL by powerful interests including the professional bodies, like the ACS for computing and the CPA for accounting. This is because of the revenue they earn from assessing the credentials of applicants.

For the government, however, the migration program has two main priorities, both of which trump any concern about the interests of recent Australian graduates. The first of these is the maintenance of high migration and the second, to promote the international student industry…

If the skilled program were adjusted to reflect the realities of the Australian labour market, it would have to be reduced. This is not an option for the big end of town or for the government. Immigration is needed to sustain desired levels of aggregate economic growth. With the recent decline in the minerals resources boom, there has been increasing emphasis on bolstering growth in the nonresource economy. The Australian Treasury now routinely relies upon the expectation of high population growth as a means of propping up targets for GDP growth.

So does the Reserve Bank. Philip Lowe, now the Governor, explains why. In an address to business economists in November 2014 Lowe told his audience that population growth is the key to offsetting Australia’s current difficult economic setting. He notes that over the past decade Australia has had almost the fastest rate of population growth amongst OECD countries. If we continue this policy, he says, it will drive Australia’s economic growth since migrants ‘will require somewhere to live, to work and to play’.

Finally, the report suggests areas of reform to both the temporary and permanent visa systems:

We start with the 457 program. The government is allowing open-ended recruitment of skilled migrants on 457 visas with no labour market testing required for most professional and managerial occupations. The decision to sponsor is left to employers… This extraordinary outcome is occurring at a time when there is an oversupply of resident graduates…

The ideal solution is to prohibit 457 recruitment or intra-company transfers where there is an oversupply of Australian residents with the skills in question… Occupations that are currently in oversupply would not be eligible for sponsorship…

If critical ICT and other professional occupations cannot be culled from the 457-eligible list for reasons of Australia’s ‘international trade obligations’, then 457 sponsors must have a legal obligation to apply a rigorous labour market testing system. This can be done by a Legislative Instrument issued by the Immigration Minister.

The second essential 457 reform is that the 457 minimum salary ‘floor’ (or TSMIT) for ICT occupations should be increased from the current standard minimum ($53,900 pa) to $75,000 per year in 2016 and indexed annually in line with wage movements for ICT professionals in Australia.23 This ‘price signal’ combined with other measures would force ICT employers to consider providing career entry pathways for Australian graduates. In the process, it would do more to encourage ICT enrolments than any fancy marketing exercise…

The permanent program

Most skilled migrants are entering under the points-tested visa subclasses. They are supposed to be highly skilled people. A few may be, but not because the recruitment system prioritises their selection.

The main function of the points-test system is to deliver the number of migrants needed to meet the government’s population growth targets and to support the overseas student industry. The result is that the system facilitates the selection of recent overseas student graduates from Australian institutions with no industry experience at all…

Promotion of the overseas student industry is a good thing. However, it should be done by helping universities improve the quality of their teaching and the university experience and not to have to rely on access to permanent residence and post-study work visas to attract overseas students. They need more funding to accomplish this goal. The recent trend to reduce the real value of government funding for domestic students has forced universities to maximise their recruitment of overseas students.

Australia’s current migration policies are delivering large numbers of professionals of dubious relevance to Australia’s skill needs. These outcomes are making it even harder for local graduates and other jobseekers to find work. Also the permanent program is a major source of the population growth Australia’s major metropolises are facing. Young Australians are being hit both ways. They have to endure tough job markets and face the prospect of being unable to afford family friendly housing in these metropolises.

The solution is to reduce the skilled program. This would be accomplished if the SOL was restored to its earlier role, as described above, and applied to the points-tested visa subclasses as well as to the 457 program.

So there you have it. Australia’s immigration system is one giant rort that is robbing young Australians of a future, as well as lowering the living standards of incumbent residents in our major cities.

The whole system requires a complete overhaul, most notably by cutting business access to 457 visas and dramatically reducing Australia’s permanent immigration program to the sensible and sustainable level of 70,000 people per year.

Politicians and many in big business are not misguided or uninformed or even stupid. They are our enemies. They are deliberately choosing courses of action such as the immigration scam that are harmful to us and our children in order to increase their profits. Hopefully more and more people will realise this as they and their families start to suffer, and cast their votes for alternatives that will end this. And hopefully change will eventually come through the ballot box, rather than the unpleasant alternative that requires wicker baskets.

I recall trying to get a job after I finished my Computer Science degree, man it was really really difficult! I haven’t been on the job market for ages, but given this report I’d hate to see what it’s like out there right now.

its actually worse. they KNOW they are fucking us. they do it anyways because that is how they advance their interests. quoting directly from a wikileaks email… https://wikileaks.org/podesta-emails/emailid/1637 … the failure you have described is not a bug, it is a feature.

“What makes for successful immigration?

It’s no brain surgery, but the media have long failed to provide a clear
credible answer. They are unable to come up with an answer or don’t like the
answer that’s staring them in the face. The main reason behind successful
immigration should be painfully obvious to even the most dimwitted of
observers: Some groups of people are almost always highly successful given
only half a chance (Jews*, Hindus/Sikhs and Chinese people, for example),
while others (Muslims, blacks** and Roma***, for instance) fare badly almost
irrespective of circumstances. The biggest group of humanity can be found
somewhere between those two extremes – the perennial overachievers and the
professional never-do-wells.”

look: more hilarity, titled: Multikultistan: A house of horrors for ordinary Germans; note this is an email sent directly to john podesta, https://wikileaks.org/podesta-emails/emailid/295 … John David Podesta (born January 8, 1949) is the former chairman of the 2016 Hillary Clinton presidential campaign. He previously served as chief of staff to President Bill Clinton and Counselor to President Barack Obama https://en.wikipedia.org/wiki/John_Podesta

“Some groups of people are almost always highly successful given only half a chance (Jews*, Hindus/Sikhs and Chinese people, for example)”

That’s extremely presumptuous. Historically migrants of Jews, Hindus/Sikhs and Chinese are cream of their crop, and provides a skewed representation of each of the races. When you go into the general population of each of the races, they can be just as thick as any of the other races.

One example is the overseas students attracted by lower ranked Aussie unis. All the top performers from those countries went to the US, the UK or Group of 8 unis in Australia. The left overs are just students who failed to make it into a good uni in their own countries and the only option for higher education was to buy a degree from a country like Australia. As you must have heard from reports, the ability and work ethics of those students are quite poor, highlighted by plagiarism, cheating and poor marks.

there is a natural variation in all peoples. depending on a number of circumstances, essentially incentives, one can control for the variability. that is, it is possible to setup incentive structures to reward behavior that aligns with our agenda, whatever it may be.

if we say the agenda is that we wish to protect our commons (i.e. our cities for example, or train system, suburbs not overrun by vibrants), we explicitly select for those behaviors (in immigrants, our enforcement mechanisms, legal/justice system etc). this relies on equity, and hence we use equity to justify collective action which by definition excludes the behaviors we do not want.

the problem is, the current framing is that we are all equal, there is no natural variability. this is enforced from the top. essentially, we pretend that the addition of all behavior sets on our commons is the same. hence adding a person from a group known to be dodgy into a commons has the same effect as adding a (some kind of good – i’m less interested in how you define this) person. see https://osf.io/q83nu/ … i like this site, data + pdf, its good stuff.

as a result of this insanity, we cannot act to protect what we have, because the left has robbed us of the moral certainty to act; short circuiting our ability to act collectively in defense of commons. but they do not do this in error, or a genuine belief that all people are equal. they KNOW, and still they seek to destroy our commons, in pursuit of personal benefits (virtue signalling is good for your career, also know as the Nuremberg excuse – your honor i sent the jews to the gas chambers as i was trying to pay my mortgage)

or to put it somewhat more glibly, equality is the opposite of quality.

‘ As you must have heard from reports, the ability and work ethics of those students are quite poor, highlighted by plagiarism, cheating and poor marks.’ – yes, i know. it devalues what i have also. fyi, i’m from the sub continent myself, and am under no illusions about the variability of people from there.

also – i reread my first comment. there is no way you would have understood what i was saying. its my bad completely.

its just that this shit upsets me. and i fear for what i see coming down the pipe. sorry about letting that get in the way of writing a understandable comment.

Its the so successful US model of in-source, off-shoring and out-source. Only benefits the 1%. Expect living standards to crash on top of stagnating wages as the economy gets more and more uncompetitive.

Once upon a time immigration was run and controlled by a government agency …..now its largely outsourced to private enterprise and run by shonks and shysters …..it is in the same place as the VET scheme, corrupted and rorted ….in many cases by immigrants who have found a lucrative place in the system themselves ………time for the government to take back control of it and clean it up ………but can’t see that happening …….until One Nation starts to get real traction

Thatcherism has failed for essential government services. Private companies will ALWAYS look for the profit by any means necessary. This is why they are in business. Not to provide a service, but to make a profit.

The same is true for ANY and ALL essential services that the government has sold off/outsourced over the past few decades. They made a quick buck from the sale, long spent.

The chickens are coming home to roost – the people pay for it over and over again.

Three-day turnaround sounds very suspicious. And since the department no longer sticks an actual visa in an actual passport, probably what happened was the agent printed up a fake letter with a fake letterhead saying the visa has been approved. Unless the Thai dude has done it before (and/or has very good English skills), how would he know the difference? Poor dude is now a grand out of pocket and an (unknowing) illegal immigrant to boot.

Hanson isn’t even taking credit.
I hope she is simply finding her feet. So far I have been unimpressed.

Maybe she is testing the water with the backpacker tax which will probably not make an iota of difference where it counts. It may give some schoolkids some holiday work, or dole “bludgers” a place to do their mutual obligations. Its not a bad thing, but it is small-fry.

“What you will notice from the above table is that trades people – with the exception of cooks – are conspicuously absent from the above table, despite claims that migrant workers are needed to build-out Australia’s booming cities:”

This is probably because most of our tradies are, or at least were, more likely to employ locals than imports, at least for apprentices. Maybe not recently with the rise of the TA and also the recent move away from hiring apprentices.

Plus there are additional qualifications imported tradies need to undertake to be able to practice their trade in Australia. We have a boatload of South African electricians here at the factory I work at, and they all needed a capstone to be able to be recognised as qualified.

This is something that IT does not require, and never really has. You can simply rock up to an IT interview and say you’re a programmer, spout some jargon, present a couple of lines of code and declare you can work for peanuts, and you’re hired. Then its the problem of the company that hired you to train you if you’re not up to scratch.

Not sure about accountants and engineers though, I would have thought there were some standards they would need to meet dictated by EA or CPA. There is no such body (that bears any industry weight, at least) for IT.

As such, it is no surprise that IT is the most exploited industry from all these (as yet unproven to be necessary) imports.

The 457 visa is a road to PR in Australia, which is why immigrants are willing to work for lower pay. The government is subsidising the imported worker at the expense of locals. Why are there protesters for asylum seekers but none for local workers?

There’s no ‘I feel good’ pay off – the local middle and working class stiffs mean less than nothing. We are all supposed to be embracing the wonderful globalised world ….. you have to get over your ‘white entitlement’ problem Ronin

Sure : the 457 & backpacker visa category is very much at the margin – not the core issue.
MB has articles on visa fraud but it spins off into the 457 niche which on any view (see stats below) is in fact the more skilled & controlled of all the temporary & tourist visa rorts.

We have 2.4 million (1.9 million temporary visa) 85k overstayer & at least 400k tourist (5% of 8 million tourist multiple stay etc) on pretext visa most working illegally.

As said the 457 & backpacker category is fractional.

Take the 1.9 milllion temporary Visa subset.
this report shows that 90% are unskilled and most of third world country of original origin.

Impact.
In rough numbers we have 1 million third world migrant guestworkers EACH in both Sydney & Melbourne.
1 in 5.
That’s the problem.
Housing, jobs, buses, trains, education, cost of living, quality of life, standard of living, housing demand, social & crime issues – etc – all massively impacted by over 1 million largely unskilled mostly illegally working third world migrant guestworkers in each city.
It’s much bigger than 457 & backpackers
– 10 x bigger in the scale numbers & scope.
We need a royal commission.

One experience I had (as an IT worker) working on a project with an Indian company was that the people they brought here on 457 visas and who ended up working here for more than 3 years all got permanent residency and stayed. Of the two I’m aware of, one has been unemployed ever since, the other still works for that Indian company despite looking for other positions. Hardly an endorsement of the quality of the 457 road to PR strategy. And the project they were part of was a complete failure – canned and millions of $s down the drain. I hasten to add my role had nothing to do with the (Indian company outsourced) part of the project which didn’t get close and led to the project’s demise.

Whenever we looked for a new developer, we would ask our hire firm for a list of people with high level skills. We always got a list of import/457 people. From indian, iran, pakistan primarily. All of them came to us after we asked for highly skilled developers to progress our projects. Without exception they where all a complete failure. The longest one lasted 3 weeks. English language was appalling. Software skills where basic at best. Yet all of them insisted they were “senior” level developers. I cant imagine what yard stick they were using for that assessment. All the resumes listed qualifications from over seas institutions that are completely unverifiable. I had a blazing row with the recruitment agency over that one, when i finally got them to admit they never checked any of the credentials put forward by these people.
Everyone of them a complete and utter waste of time and money.

Working in IT, it is the case that a large # of Indians have entered the market in the last few years and are driving down wages and crowding out opportunities. Much of this is driven by offshoring and outsourcing and in many cases the quality of the people is not great. There are plenty of good ones also however. And although companies can be pretty dumb with their hiring decisions, the poorer folks will gradually get weeded out as most are hired as contractors so if they don’t cut it, they’re let go.

But of course, many now will have PR so are part of the workforce.

I actually think we’re at the tipping point for this and most of these outsourcing deals are now done, failing in many cases, less attractive generally, and being threatened by the rise of Cloud and SaaS solutions. So the salad days for the big Indian outsourcers are done IMO.

But it would be smart to overhaul the 457 system so this sort of stuff can’t be repeated.

He notes that over the past decade Australia has had almost the fastest rate of population growth amongst OECD countries. If we continue this policy, he says, it will drive Australia’s economic growth since migrants ‘will require somewhere to live, to work and to play’.

This reminds me of that Roadrunner cartoon where Wile E. Coyote is sitting a cart with a sail and propelling it with a fan from inside the cart. How is all this immigrant-generated domestic activity going to pay for all those iPhones and Land Rovers and all the other stuff Australia doesn’t produce? Hey Phil, guess what? Australia can’t support a current account deficit by selling US Treasuries. Only the US can do that. You’ll have to get the economy to export something other than dirt, cattle, and sh*t diplomas for rich foreign kids at some point.

70,000 is not sensible and sustainable at present.
There is a huge lag in the construction of infrastructure as any resident of Sydney or Melbourne who uses car or train or bus to travel to work can tell you.
Schools in areas with big increases of density are also being swamped by both students and in many cases ESL students constitute mauch of the increase, further adding to the problems of gaining a decent education.
Immigration ought be stopped until services and infrastructure are back to former levels.
Perpetual growth is never sustainable in a world with limited resources.
The Liberal coalition is destroying the standards of living of ordinary Australians in Sydney and Melbourne with their “Big Australia” policy and Labour is not much better, if better at all.

The ALP and Greens are just as bad. A few minor parties (Sustainable Australia, Democrats if they still exist) have better population/immigration policies. As this issue causes problems with so many aspects of our lives, concerned people have almost nowhere to go except preference One Nation higher than any of the majors despite their nonsense on so many things including candidate selection. If they were in a position of power and got immigration slashed, that may possibly compensate for their nonsense elsewhere, though climate change denial is a problem for me.

“There is a huge lag in the construction of infrastructure as any resident of Sydney or Melbourne who uses car or train or bus to travel to work can tell you.”

Just to chime in once again from my sector, since (fortunately) using an Emergency Department will be a much rarer event that catching the bus or train for most of you. When the day comes that you or your family need to use the public health system, you will know the meaning of inadequate infrastructure and unsustainable immigration like you never have before.

IT has another issue of companies unwilling to upskill. With Technologies changing frequently developers are often caught out not having experience is specific technologies. New projects start up and even very talented developers are overlooked for those roles in favour of 457s who have the right acronyms on their CV.

I am not talking about many months worth of upskilling either. It is literally a few days to become productive. Companies refuse to do so because 457s are available on-tap.

EDIT: It would actually be discrimination not to hire a 457 in example above.

This eating away at me now. My current instructions from HR are to pick the best person for the job. However, market testing is supposed to be part of the process. Should my HR department actually be instructing me to only hire 457 is no suitable local candidates are available?

“This is having a disastrous impact on Sydney and Melbourne where just over half of the migrants settle”

It’s a bit weird to be saying this and then not once in the entire report (as far as I can see) mention the 187 visa (Regional Sponsored Migration). If keeping numbers steady was the goal (not that I agree it’s a good goal) why not cut the 457s and increase the number of 187s by the same amount. If people really are so keen to migrate to Australia, why not require them to spend a few years in a regional area? Surely if anyone can figure out how to do their work remotely it’s IT workers.

The real damage started in 2007 with widespread rorting of the 880 class skilled permanent residence visa. The whole immigration program and immigration fraud is out of control. No one in Canberra is completely across the issues. There has been so much movement due to the merge with Customs, noone has any idea anymore.